External economic data color this week’s trade. NHKSI Research projects an increase in FFR of 75 bps instead of 100 bps, as inflation is projected to be under control, or US Headline Inflation for July which is projected at 0.2% MoM (vs. Jun. 1.3% MoM), based on a Bloomberg survey. Meanwhile, US GDP 2Q22 is projected to grow 0.5% QoQ (Vs. 1Q22 – 1.6% QoQ).

Corporate Bonds
Three New Bonds Listed This Week. During this week’s trading which took place on 18-22 July 2022, there were three new bonds listed on the Indonesia Stock Exchange (IDX). This brings the bonds and sukuk listed on the IDX throughout 2022 to 69 issuances from 54 issuers. The total value of the new bonds issued for the period 18-22 July 2022 is IDR 5.4 trillion. As a result, the total issuance value for bonds and sukuk throughout 2022 has reached IDR 85.48 trillion. Meanwhile, the total issuance of bonds and sukuk listed on the IDX amounted to 493 issuances from 121 issuers with an outstanding nominal value of IDR 439.72 trillion and USD 47.5 million. (Kontan)

Domestic Issue
Government Extends Relaxation of Medical Device Imports. The government has decided to extend the tax incentive for the import of medical devices or the delivery of goods related to COVID-19 until the end of December 2022. The decision is regulated in Minister of Finance Regulation (PMK) Number 113/PMK.03/2022 concerning Amendments to PMK Number 226/PMK 03/2021 concerning Provision of Tax Incentives on Necessary Goods and Extension of the Application of Income Tax Facilities for Human Resources in the Health Sector Based on Government Regulation Number 29 of 2020 concerning Income Tax Facilities in the Context of Handling Corona Virus Disease 2019 (Covid-19). (CNN Indonesia)

Ignoring Shrinkflation, BI 7DRRR remains at 3.50%. Producers attempt to reduce product size but maintain prices, in order to increase margins amid rising raw material prices and supply shortages, or Shrinkflation. Consumers are more sensitive to price increases than size contraction. Meanwhile, BI’s decision to maintain the BI 7DRRR 3.50% because it uses the Core Inflation reference and not Headline Inflation, complements Foreign Reserves which are maintained at USD136.4 billion and Capital Outflows which are still being monitored.

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